ZURICH (Reuters) – The Swiss National Bank endorses the measures Credit Suisse has taken to transform the embattled Swiss bank and shore up its capital, SNB Vice Chairman Martin Schlegel said. “The SNB welcomes the steps recently announced for the strategic transformation of Credit Suisse,” Schlegel told Swiss newspaper Finanz und Wirtschaft in an interview […]
ZURICH (Reuters) – The Swiss National Bank endorses the measures Credit Suisse has taken to transform the embattled Swiss bank and shore up its capital, SNB Vice Chairman Martin Schlegel said.
“The SNB welcomes the steps recently announced for the strategic transformation of Credit Suisse,” Schlegel told Swiss newspaper Finanz und Wirtschaft in an interview published online on Friday.
“The new focus of the business model will lead to a reduction in risks. At the same time, Credit Suisse is strengthening its capital base,” added Schlegel, who oversees financial stability for the central bank.
Credit Suisse on Thursday unveiled plans to raise 4 billion Swiss francs ($4.01 billion) from investors, cut thousands of jobs and shift its focus from investment banking more towards rich clients.
The SNB has been following closely the situation at Credit Suisse, which it has designated as one of Switzerland’s two globally systemic banks along with cross-town rival UBS.
UBS economists, meanwhile, expect the SNB to post a third-quarter loss of around 50 billion Swiss francs when it reports its results on Monday.
Such a loss would halve the SNB’s equity which stood at 103 billion francs at the half-year stage, but this would have no effect on the bank’s policy, Schlegel said.
“Directly, this would have no impact on the SNB. We can pursue our tasks and fulfill our mandate even with negative equity capital,” he said.
“Nevertheless, it is important that we have enough equity. It helps the credibility of a central bank if it is well capitalized.”
($1 = 0.9964 Swiss francs)
(Reporting by John Revill; Editing by Michael Shields)
